Friday, April 26, 2013
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Renewable energy embraced as tourism draw BY KELSEY MILLER The Daily Record
Maryland’s beach communities may see more than boats on the horizon within the next few years, as passage of the Maryland Offshore Wind Energy Act of 2013 means a new form of renewable energy is coming to town. While the law is in the early stages of a long contracting and construction journey, business and tourism associations are embracing the renewable energy as a way to reduce costs in the long run, create local jobs and attract tourists hip to the green movement to see the turbines while enjoying the beach. “Anything that can help reduce the cost of business is something we support,” said Susan Jones, executive director of the Ocean City Hotel-Motel Restaurant Association. “We generally support the greening of our community. It’s great to look at alternative ways to save money.” The bill designates a $1.7 million subsidy over 20 years for construction of wind turbines in federal waters off the coast of Ocean City. The funds come
from a $1.50 monthly surcharge on state electricity bills. The act was signed by Gov. Martin O’Malley earlier this month — a big legislative victory for him and other offshore wind energy supporters. Liz Burdock, with the Maryland Business Coalition for Offshore Wind, said now that the bill has passed, the coalition is taking on “project implementation” and working to create a supply chain of manufacturing and energy companies throughout the state. “We need to start building the industry today,” Burdock said. The coalition is focused on starting the supply chain in Baltimore, creating transfer points around Crisfield and Cambridge and housing many of the manufacturing companies in Ocean City, she said. The bill creates a $10 million fund for small and emerging businesses, and the goal is to put turbines in the water by 2017, Burdock said. “I’m hoping much is done locally,” said Melanie Pursel, executive director for the Ocean City Chamber of Commerce. Pursel and fellow chamber members will be staying on top of the bill, she said, in order to make sure businesses in the area are able to compete for the contracts.
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A speed boat passes by offshore windmills in the North Sea near Denmark. Gov. Martin O’Malley (D) signed legislation into law earlier this month that funds the construction of wind turbines in federal waters off the coast of Ocean City.
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“We’re all going to be fighting for those jobs for our local economy,” Pursel said. But, aside from increased jobs in the area, the wind turbines could also draw tourists as part of the popular eco-conscious movement. “Tourism has the possibility of being affected in a positive way,” Burdock said. The turbines could create a new, innovative approach to tourism as visitors could be taken out to the wind farm as an attraction, she added. New Jersey, which is working on a pilot offshore wind program, is exploring this option of ferrying tourists out to the turbines, Burdock said. Hotels and restaurants are hoping environmentally friendly customers will be drawn to the town. “People following the green movement may want to come see them,” Jones said of the turbines. “We’d think of it as more of an attraction.” Karen Hood, spokeswoman for the Maryland Department of Business and Tourism, predicted that Maryland’s legislative platforms could allow tourists to see the state as a “green travel” destination. Tourists would think that “Maryland cares about the environment, so we should travel there,” Hood said. While some are worried that the turbines will be an eyesore to those who visit Ocean City’s beaches, business associations say the view will not be an issue. “Unlike Cape Wind, we don’t have the visibility issues, they were worked out in the beginning,” Burdock said. The turbines will be 10 to 30 miles off the coast and a barely visible blip on the horizon. “We understand how important [the tourism] industry is to Ocean City.” As the project moves slowly forward, supporters hope to keep the construction with local businesses and uphold the energy-saving projections. “At this point, it’s just the uncertainty as to where the connection sites will be,” Pursel said. “And will it generate what the expectation is?” Overall, business and tourism organizations see a step toward sustainability as a plus for industry and tourism. “We are supportive of any kind of alternative energy,” Pursel said. “Any time you’re having green energy, it’s a draw.”
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Friday, April 26, 2013
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Fracking could produce legal challenges Edwards: A lawsuit ‘wouldn’t be cheap’ BY MARGIE HYSLOP Special to The Daily Record
Maryland’s decision on whether to allow hydraulic fracturing to tap gas trapped in shale rock remains on hold, awaiting a state commission’s recommendations — expected in August 2014. Although parties on both sides of the issue say they will hold their fire for answers they hope that state-sponsored studies will provide to inform the advisory commission’s report, neither is ruling out a legal showdown. The push to enact a statutory ban on the practice, known as fracking, until its impacts on health and the environment are fully assessed will continue when the legislature reconvenes again in January, said Del. Heather Mizeur, D-Montgomery. Her bill to write such a moratorium into law narrowly failed on a committee vote in March. Despite Gov. Martin O’Malley’s 2011 executive order requiring studies on how to protect Maryland against risks from the controversial process, no law prevents the Maryland Department of the Environment from approving permits for fracking. Hydraulic fracturing for shale gas involves drilling thousands of feet underground vertically, then horizontally, and injecting large volumes of water, chemicals and sand, under high pressure, to fissure layers of shale rock and release natural gas. The method has been used to increase yields from shale gas deposits in western states since the 1990s, but fracking wells did not spring up in eastern states until about five years ago after scientists estimated that shale in parts of the Appalachian region held a wealth of natural gas. Maryland fracking opponents are concerned by complaints of flammable, tainted tap water, and rural townships have been overwhelmed by traffic and noise that came with the gas boom in neighboring Pennsylvania, where few new safeguards were enacted before fracking began.
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A Maryland commission is expected to offer recommendations in August 2014 on whether to allow hydraulic fracturing. While parties on both sides await, neither is ruling out a legal showdown over the practice, which has drawn environmental and health objections.
Currently, in Maryland a gas company could apply to MDE to frack for gas and contend that the governor’s order does not have controlling legal authority to stop it, Mizeur said. “To give the governor’s executive order the force of law and guard against lawsuits that would suggest otherwise,” the state needs a statutory moratorium, according to Mizeur and other environmental activists. The Chesapeake Climate Action Network advocated for a legislative moratorium until the studies are complete because of the possibility that the gas industry might take state agencies to court for failing to act on permit applications, said Diana Dascalu-Joffe, senior general counsel of the Takoma Park-based group. “There’s a legal question about whether there is a moratorium in place,” Dascalu-Joffe said. No applications are pending for
drilling in shale deposits in Maryland, MDE spokesman Jay Apperson said. Seven lapsed and were not renewed, and an eighth was withdrawn, he said. Companies that sought permits are waiting on the commission’s report and have taken their business to states with better opportunities to drill for oil and “wet” gas, which are drawing better prices than the “dry” gas believed to be in Maryland, said Drew Cobbs, executive director of the Maryland Petroleum Council. Without an active application and until a gas company “felt, for some reason, that the state was not dealing in good faith or dealing appropriately, they wouldn’t have any cause for action,” Cobbs said. Randy Lutz, a lawyer who has represented companies that considered trying to extract shale gas in Maryland, said he does not expect the gas industry to apply for fracking permits in Maryland again before the middle of 2015. By then, Maryland will have a new governor, and the Marcellus Shale Safe Drilling Initiative Advisory Commission, established under O’Malley’s order, will have expired. “Until there’s a new governor and the regulations are sorted out, you don’t even know what the cost factors are in Maryland,” Lutz said. In Garrett County, where almost a third of the land was leased on the prospect of fracking, “a lot of people want it done sooner but are willing to wait and see,” said Sen. George C. Edwards, R-Allegany and Garrett. But “there’s a lot of frustration on both sides,” Edwards said, including among landowners. A coalition of New York landowners is raising money to sue that state over its continued delays in deciding whether to allow fracking for shale gas under their land. The Joint Landowners Coalition of
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New York — representing more than 70,000 members owning more than 1 million acres of land — contends New York’s inaction is a de facto taking of property that violates their rights under the Fifth Amendment of the U.S. Constitution. “We can see wells being drilled in Pennsylvania … [gas] flares at night and how it has benefited them economically and … their air” as a cleaner fuel, Scott Kurkoski, a lawyer who represents the New York landowners, said from his of-
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There’s a legal question about whether there is a moratorium in place. Diana Dascalu-Joffe Senior general Counsel, Chesapeake Climate Action Network
fice in Binghamton, N.Y., north of a cluster of fracking operations that are south of the New York-Pennsylvania line. For Maryland landowners, the view across the state line could look similar, although New York’s decision process is a little different, Dascalu-Joffe said. In Maryland, Lutz said, “it wouldn’t surprise me if a group of landowners got together and tried to challenge a moratorium or overreaching regulation.” But Maryland has just 1 percent of the Marcellus shale deposits, far less than New York, and “a lawsuit wouldn’t be cheap,” Edwards said.
Friday, April 26, 2013
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Opinion is still mixed about fracking’s future Delegate says ‘train has left the station,’ while firm sees benefits in state’s delays BY JEANNETTE BELLIVEAU Special to The Daily Record
Had Maryland been an early adopter of horizontal drilling to extract shale gas, all 1,000 or so of Garrett County’s businesses, from heavy-equipment giant Beitzel Corp., headquartered in Grantsville, to the Wal-Mart and Clear Mountain Bank in Oakland, might be thriving to keep up with an energy boom. “If you don’t have a job, you don’t want one,” is the mantra in today’s energy boomtowns — the areas of North Dakota, Texas and Pennsylvania that sit atop gas-rich shale. With unemployment in Garrett County at about 8.9 percent in February, two full points above the statewide 6.9 percent, fracking could help erase unemployment of about 1,588 folks in a labor force of 17,142. Instead, Maryland Gov. Martin O’Malley decided to go slow on fracking development and install an informal moratorium as he awaits the results of the Governor’s Marcellus Shale Advisory Commission on the risks of fracking, which may take another year or more to complete its work. And as the commission went about its business, natural gas prices dropped across the nation. The pace of drilling has slowed among Maryland’s neighbors, in-
cluding West Virginia and Pennsylvania, also home to the Marcellus and Utica shale plays, as are much of New York and Ohio. Nearby areas produce what is called “dry” natural gas, but extractors are moving toward more lucrative plays with natural gas liquids and oils.
‘Train left the station’ While fracking goes on to the north, south and west, Maryland’s little swath of the Marcellus shale has managed to stand motionless. Drilling activity has shifted farther away from Maryland, according to a January report from the governor’s commission that noted plummeting natural gas prices and that all drilling applications in the state have been withdrawn. “The train has left the station,” Del. Wendell R. Beitzel, R-Allegany and Garrett — a distant relative of the heavy equipment company’s founders — said of the current status of fracking in the Western Maryland district he represents. Beitzel said in a telephone interview that with only 2 percent of the rich Marcellus shale at play in Maryland, the state has sort of fallen off the radar of the big national energy companies whose huge capital investments jump-start the demand for local jobs and services. From his rather different vantage point in Pennsylvania with the Linde
Corp., which constructs pipelines to extract gas from Marcellus shale, director of communications Kevin Lynn sees a bright future a few years off in Maryland. Maryland’s hesitancy has, perhaps, been a good thing, given recent advances toward cleaner fracking technology and other advances. “These companies are much more strict than they were even two years ago,” Lynn said. Once the gas companies can apply in Maryland, they’ll hire local, Lynn said. Surveyors, tradesmen, rental companies, construction and service companies, and other workers will be in demand. That may mean that if Maryland arrives late to shale gas , it may enjoy the benefits of a process better able to address environmental concerns and still be profitable to Western Maryland. Beitzel said a few factors need to come into play to make fracking a reality. If a big liquid natural gas facility gets off the ground to export LNG overseas out of Louisiana, that could start moving the cost of natural gas up, the delegate said, as would greater use of natural gas for larger over-the-road trucks and city buses. However, if Maryland adopts higher taxes and regulations on fracking than Ohio, West Virginia and Pennsylvania, no
fracking will occur here until “they suck all the gas out of neighboring states,” Beitzel said. The Garrett County Chamber of Commerce is watching for future moves by the state. “The Chamber does support safe and responsible shale gas development,” said Nicole Christian, its president and CEO. “And we do believe there will be tremendous economic opportunity for Garrett County.” Christian said she can see Garrett lawyers being heavily involved in leasing aspects, as well as the surveying, food and beverage and lodging sectors of the local economy seeing heavy demand. “We don’t feel that anything’s going to happen, though, until the governor’s advisory commission completes its work — until they’ve finalized all the reports and the Department of Natural Resources and the Maryland Department of the Environment and the legislature and the executive branch have all had a chance to go through it,” she said. But for now, “Nothing is lined up,” said Professor Keith Eshleman of the University of Maryland Center for Environmental Science in Frostburg. “The Maryland Department of the Environment has an unofficial moratorium on gas drilling.”
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